Richard Greene: How to make property insurance affordable

Saturday

Feb 2, 2013 at 12:01 AM

By RICHARD GREENE, Guest Columnist

The Herald-Tribune has published several articles relating to Citizens Property Insurance and its ongoing battle to raise rates and to shed clients. But there has been shamefully very little written about what could be done to reverse premium increases.

Do these increases need to be accepted every time a policy is renewed? What is the limit that consumers can realistically afford? And why isn't there a more vocal push to change this trend?

Insurance cost and availability: Those are two concerns to every Florida property owner -- home, condominium and commercial.

As both a Realtor and an independent insurance agent of 38 years, I see these problems as they affect both my clients and, in the broader scheme, the whole economy of Florida.

When the governor and, in lock step with him, the Legislature say that the only way to have insurance is to continually raise premiums and diminish what a policy will cover, that shows the success that the insurance lobby has in Tallahassee. And it is bad news for Florida consumers.

When the Florida Office of Insurance Regulation allows companies to shirk their social responsibility and cherry-pick where they will offer insurance, that shows the success the insurance lobby has in Tallahassee. And it is bad news for Florida consumers.

When premiums rise, and coverage is stripped from the policy, those are desperate measures driven by the insurance industry that sees only one way to make a profit -- more money for them, and less potential to pay any of it out to clients. That is bad news for Florida consumers.

And when this all happens at once, people have trouble protecting themselves from loss.

Because of the rising cost and the reduced availability of options, their biggest investments might have to go unprotected. Or they might have to sell -- and who wants to buy a problem like that?

So, they might have to reduce their sale price -- another slam to the real estate industry. And when people can't sell, and people don't want to buy, all the industries that they support suffer, too. The economy nose-dives.

But this does not have to continue! My solution is perhaps oversimplified, but the theory can be tweaked to make insurance affordable and competitive once more.

Here are five things I suggest:

1) Stop standard insurance companies from writing wind and hurricane insurance. This will leave them with "standard" policy perils -- which are written everywhere in the nation and can be offered similarly here.

2) Force all insurance companies to offer insurance everywhere in the state. This would spur competition -- and lower prices.

3) Leave the hazards of wind and hurricane to Citizens. The premiums that the standard companies were previously sending to unregulated, offshore reinsurance companies could now be sent to Citizens to bolster its fund -- and be audited and regulated. That keeps the money in Florida, too!

4) Audit and regulate the management firms that manage the insurance companies. These firms currently siphon off premium dollars and make the insurance companies less solvent.

5) Eliminate the so-called wind pool designation areas, which unfairly penalize residents of those areas, causing them to pay significantly more in premiums and to have fewer companies willing to write their coverage.

But the governor and Legislature won't make any effort to make this happen unless we raise our voices and contact them.

And, if you are reading this article and don't act, don't be surprised -- and don't complain -- when your premiums rise and insurance is less available. Make the effort. Secure your future. It is up to us. It is up to you!